Shares in Nuix dived after it missed its prospectus forecasts

Data analysis company Nuix, which posted stellar rises its share price, doubling on the opening day of trade following its IPO in December 2020, is in trouble with investors today after its latest earnings guidance revealed the company is set to miss some of its prospectus guidance by tens of millions of dollars.

Shares in the 20-year-old Sydney-based, global risk, compliance and security software company (ASX: NGL) are now hitting record lows from January’s high of $11.86, and in afternoon trade sit well below the listing price of $5.31.

Nuix shares closed Wednesday off nearly 16% at $4.28, having fallen as low as $4.20.

The Nuix share price since its January highs. Source: ASX

Analysts are not expecting the share price to rebound quickly with Henry Jennings, senior investment analyst and portfolio manager at Marcus Today, telling ausbiz that it will take some time for the company to regain trust from investors.

The company’s share price already took a hit several weeks ago as concerns grew that the company would miss its prospectus numbers. Nuix predicted revenues of $193.5 million in FY2021 for a net profit of $20 million.

In a forecast update to the market today, the Nuix revised down its pro forma revenue to $180-185 million compared to the IPO prospectus forecast of $193.5m.

Annualised contract value was trimmed to $168-177m from the prospectus figure of $199.6m.

However, pro forma EBITDA was increased to $64.6-66.6m (v $63.6m), put down in part to a lower headcount, reduced travel, and FX benefit from USD costs.

The company said that during April, “a significant and larger than expected number of Nuix’s customers, including one of its largest, elected to transition from module-based subscription licenses to consumption and SaaS license models, resulting in a shift in both revenue and ACV profiles”.

Nuix said that while the transition had a near-term negative impact on statutory revenue generation, there was strong growth in new customer acquisition and retention and there is a higher-than-expected level of multi-year contracts.

CEO Rod Vawdrey said: “The fundamental revenue drivers for Nuix are strong and underpinned by a growing order book and pipeline. It reflects the underlying strength of the Nuix software offering, a sticky, loyal customer base, strong growth in new business and an increase in order size.”

The company’s key shareholders from the IPO included Macquarie Group,HSBC, JP Morgan, BNP Paribas, NAB, Citicorp and UBS.

Nuix is defending the claim, which is in the preparatory stages before the Federal Court.